Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Seven Companies Set to Rake in the Cash on China's Consumer Boom!

Companies / China Stocks Feb 13, 2008 - 06:55 AM GMT

By: Money_and_Markets

Companies

Best Financial Markets Analysis Article“Gung Hay Fat Choy!” - That's the Mandarin greeting for Happy New Year, and it was uttered by 1.3 billion Chinese last Thursday, which began the Year of the Rat.

The Lunar New Year is like our Thanksgiving, Christmas and New Year's all rolled into an elaborate celebration of reflection, gratitude, renewal and hope. It is the single most celebrated holiday in China.


Children love the festivities because they receive new clothes and red envelopes called “hung bao.” The envelopes are decorated with lucky symbols and represent the wish for fortune and wealth in the coming year. The color red signifies good luck … and inside each packet is cold, hard cash!

Red packet money is given out by parents, grandparents, uncles and aunts, or anybody who happens to visit during the New Year's celebration.

Red envelopes mean lots of cash for Chinese consumers (and some companies!)
Red envelopes mean lots of cash for Chinese consumers (and some companies!)

If you're a Chinese kid, the more visitors the better!

The tradition of red envelopes has even carried over into other holidays as well as the workplace. Many employers hand out their year-end bonuses in red envelopes stuffed with hundreds – even thousands – of dollars.

And this red envelope money is more than just a token custom in China ...

This Money Is the Fuel for an Incredible Consumer Spending Boom in China

Look, Chinese youth aren't that different from kids in the U.S. – they have a long list of things they can't live without!

And if you understand how China's young people will spend their red envelope money, you'll find a list of successful companies who could see their stocks head to the moon.

Today, we'll take a look at seven firms that I consider big winners of all this gifted money. They're what I like to call “red envelope companies” …

Red Envelope Company #1: China Mobile (NYSE: CHL)

The very, very first thing every Chinese youth acquires once they have the money is a cell phone. My kids seem to live on their cell phones. That's even truer for Chinese kids because so many of their homes don't have landline phones or personal computers.

Remember, cell phones are not only a Chinese youth's lifeline to their friends; it is also the primary way they connect to the Internet.

Cell phones are wildly popular in China …
Cell phones are wildly popular in
China …

Red Envelope Company #2: The 9 Limited (Nasdaq: NCTY)

Almost every day I have to chase my kids off the computer. They love to play what are called massively multiplayer online role playing games (MMORPGs), which are Internet-based games that let them play people from all over the world.

My kids especially love a game called “World of Warcraft.” It's the most popular Internet game in the world, and The 9 Limited has the exclusive rights to market/distribute it in China. I suspect a lot of kids over there will be lining up to play!

Red Envelope Company #3: Yum Brands (NYSE: YUM)

If Yum Brands doesn't sound familiar, the three companies it operates sure will: Taco Bell, KFC, and Pizza Hut.

The Chinese love everything western, but they especially love eating out at a Pizza Hut or KFC. For many, it' as close as they'll ever get to the U.S. Heck, more than 50% of Yum's sales come from outside North America, and its booming business in China is sending profits to the moon!

Hey, don't almost all kids love fast food?

Red Envelope Company #4: LVMH (Pink Sheets: LVMUY.PK)

The Chinese are very aware of designer labels, and some of the country's most popular luxury items are extremely expensive Louis Vuitton purses. I see more Louis Vuitton purses in Shanghai and Beijing than in San Francisco or Boston!

While very few young Chinese girls will get enough red envelope money to pick up one of these handbags, plenty of working Chinese women will be more than happy to blow their bonuses on a shiny new purse.

The Chinese love eating at Yum Brands' KFC and Pizza Hut restaurants.
The Chinese love eating at
Yum Brands' KFC and Pizza Hut
restaurants.

Red Envelope Company #5: Home Inns (Nasdaq: HMIN)

It wasn't that long ago that travel restrictions prevented the Chinese from traveling around their own country. These days, the country's citizens could spend a lifetime visiting everything their own country has to offer. Lots of younger people will do just that.

And while most Chinese can't afford to stay at a Hyatt, Marriott, or Ritz Carlton, they can afford to stay at a Home Inn, the Howard Johnson of China!

Red Envelope Company #6: New Oriental Education (NYSE: EDU)

The smart, ambitious Chinese youth, instead of spending their money on some consumer whim, will take their red envelope money and invest it in something that will pay them back hundreds, thousands, even millions of dollars down the road.

I'm talking about English classes, the key to winning the career race in China, or better yet, gaining admission into an American university. New Oriental will be there to accommodate these aggressive students, and rake in the cash along the way.

Red Envelope Company #7: Companhia Vale do Rio Doce (NYSE: RIO)

While Chinese youngsters aren't going to rush out and invest in a copper company, nearly everything they want — electronics, homes, and cars — requires lots of copper.

That's why the Chinese call copper “red gold.”

According to Merril Lynch, China consumes two to four times as much in non-precious metals as the United States, and is responsible for at least 75% of the demand growth for many commodities.

This is precisely why state-owned Aluminum Corp. of China just bought a minority stake in Rio Tinto.

That brings me to …

My #1 Rule for Successful Investing

If you want to make the most of your money over the next ten years (at least!), invest in those companies that SUPPLY what Chinese consumers are DEMANDING, whether it's cell phones, pizzas, video games or even natural resources.

All you have to do is follow the money from the red envelopes to company cash registers!

Best wishes,

Tony

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Tan Boon Hock
13 Feb 08, 12:55
Mandarin Correction

Hello Tony,

I wish to correct your Mandarin:

"Gung Hay Fat Choy!” - That's the Mandarin greeting for Happy New Year.

Actually the correct Mandarin is "Gong Xi Fa Cai". "Gung Hay Fat Choy" is the Cantonese pronunciation.

Rgds,

BH Tan


Qi Hong
15 Feb 08, 16:52
Mandarin Correction... Again

Wouldn't the correct pronunciation be:

Chun Jie Kuai Le! ???


Post Comment

Only logged in users are allowed to post comments. Register/ Log in